ECON102 Lecture Notes - Phillips Curve, Trade Restriction, Free Trade
Document Summary
Rule based policies graph* targeting r: procyclical. Ex. recession (down) govt does concessionary (down) Graph one: animal spirits go down, ad goes left. Graph two: prices and output falls, demand shifts left (less money in pocket) interest rates fall fed has to sell bond, ms shifts left. 1970s and stagflation graph: stagflation: high rates of inflation with high unemployment rate, high price, stagnant output friedmans explanation. Deficit v. surplus: govt revenues govt spending, 2. 7trill 3. 7 trill 2012, revenue: taxes, spending: g and tp, deficit: spending > revenues, surplus: revenues > spending. Public debt: govt continuously runs deficits, accumulation of deficits, 37 out of last 40 years for us (16 trill) Debt to gdp ratio: best way, amount of debt (16 trill) / size of economy (16 trill) = 100% japans is 200% greece 160% italy 130% future outlook for us. Benefits from trade: both countries benefit.
